Too big to fail has been around since the early 1980's when Continental Illinois went belly up and the Fed stepped in to cover them. That, and the Greenspan Put has been around since 1987 or so. Is it any surprise that 20 years later of the same behavior on behalf of the Fed, the banks acted the way they did?
"If some banks are thought to be too big to fail, then, in the words of a distinguished American economist, they are too big. It is not sensible to allow large banks to combine high street retail banking with risky investment banking or funding strategies, and then provide an implicit state guarantee against failure." - Mervyn King, Governor, Bank of England quoting Alan Greenspan.
"If some banks are thought to be too big to fail, then, in the words of a distinguished American economist, they are too big. It is not sensible to allow large banks to combine high street retail banking with risky investment banking or funding strategies, and then provide an implicit state guarantee against failure." - Mervyn King, Governor, Bank of England quoting Alan Greenspan.
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